tv Street Signs CNBC October 9, 2014 2:00pm-3:01pm EDT
here yesterday, gone today. stocks and oil are both tanking, beyond yields staying incredibly low. this is an incredible reversal from yesterday. >> it is. let's take a closer look at what is going on, stocks have retraced some of their losses. we are off the lows of the day. we're down sharply around two-month lows. when was the last time we saw this level of volatility? this is the third straight 200 plus-point move on the dow. that has not happened in over three years. with global growth fees at the fore, bonds are rallying, gold reaching a two-week high. the s&p energy index behind me down 3%, down 14% from the record high in june. well and truly correction territory. let's get to our market exper ,
experts,experts, bob pisani at the nye. >> the global growth combining with concerns about when the fed might be raising interest rates. number one, the poor german trade data. we had another month of it. exports down 5.8% in august. that was a real disappointment overall. number two, draghi speech from him, no recovery without economic reform. again, asking european leaders to do something on the forefront. let's face it, ebola is still out there. and oil dropping as well here. you can see this in the volume and some of the etfs, the concerns i've just mentioned. for example, the heaviest volume among etfs, vanguard europe, the vgk. put up said board there. the energy stocks, energy select, materials have heavy volumes in the etfs.
let's move on, talk about the high-yield bonds, the hyg is moving on. we saw concerns generally in the last few days. people have been asking me about the energy sector. put up some of the shale plays. a lot of the stocks in the shell group issue high-yield bonds. as the oil drops, it becomes more difficult to go out with the high yield bonds. finally want to note, a lot of the names are down double digits in the last week. some of them, penn virginia, comstock. whiting, apache. this is why we've been emphas e emphasizing this decline. >> rick santelli, the ten-year yield has dropped 9% in the past three months. to what extent is global weakness suggest even low
lower-year-olds from here? >> i think yields can do down a bill more but the real issue continues to be europe. i'll tell you why. we have germany export economy, most of the european economy are export or consumption. really, really when you get down to the brass tacks, where's the issue that's going to transmit the coal that europe has to the u.s.? i think it goes back to the credit side. if the european economies deteriorate, the southern european economies will deteriorate faster. so i still think at the end of the day it's a credit issue. the boone did make a new all-time yield low under day. watch the dax, the boone, you'll stay out of trouble. >> rick, thank you very much. let's get back to the stock market where we've wiped out pretty much all of yesterday's gains.
i want to give credit where credit is due. you made a great call earlier this week, you said go long volatility. what is the cause of the huge market swings that we are showing our viewers right now? >> you know, brian, we've been talking about this since the fed meeting, even just before the fed meeting. about this increase in volatility. we've been kind of on the other side of that trade all year. that was a big turnaround for us at jeffries going out with a kind of long volatility trade. the idea was pretty simple as we get to the unwind of qe and the end of qe, this is it. we're going to see the last bits of it over the course of this month. then we're going to find out just how this market's going to operate when it's trying to figure out what the fed does on the other side of the policy reaction, what the fed does when things go well. we've learned about what the fed does when things go wrong. they backstop us.
what we don't really know is how high do they have to take rates? could the dollar suplant rate moves? you have variables that can go in different directions and affect portfolios differently, areas of the stock market differently and areas of the economy differently. it becomes a much more treacherous game trying to play the fed game really when they're on the other side of the business cycle. >> okay. up 300, down 400, up 400, down 300, to me that says people don't know. how do you keep that from scaring away your clients? how do you convince americans that the stock market right now is still a good bet? or do you? >> well, i do. i think over the long run we're not going to change our long-term views. we've been bullish for a long time and we believe, really, that qe has done the job. it's work. we're taking qe away, not because it corn tam natu-- cont
the ground water, we're taking it away because it worked. the mark set going through jitters. the fed is not always the best communicator with the market in these times of inflection. you know, i have to point out, part of our volatility call, most of our volatility call was just the idea that people are going to misunderstand what the fed is saying and what the fed is doing. look at what they gave you in the dots. they told you at the end of 2017 we were going to have 3.75% interest rates. they raised all of their forecast for interest rates during the 2015 and 2016 forecast periods for the sep. those were big material increases. on the other side, everything else they said was completely dovish. you had this weird mix you couldn't figure out. one side of it was hawkish, one side of it was dovish. we came out with a note today saying maybe they've all turned into a combination of a dove and a hawk called a dawk. >> do you think, jeff, that this
could start turning into something that could resemble more like a correction? >> yes. it's amazing that to buy the dip strategy is being questioned with the s&p just about 3.7% off the highs. i've been on the show a number of times this year saying the historic odds of the kind of rally we've had since june of 2012 without anything more than a 6% pullback, the historic odds said sometime this year you get a 10% to 12% pullback. right now it's unknowable, whether we started this two week eagles. . this is the fourth longest market without a 10% correction in u.s. history. i know people don't like to see the value of their retirement plan go down. if we get a 10% or more correction, would that ultimately prove a good thing? >> yes, i think, i've said this many times on cnbc, i think we're in a secular bull market
that has eight to ten years left to run. if you annualize -- since 1989 earnings for the s&p have grown at 6.15% per year. if you annualize this year's estimate into 2020, you come up with $183.36 in earnings in 2020. if you put a market median and p/e multiple of 15.5, you come up with a 28.42 price objective in 2020 for the s&p 500. yes, i think a 10% pull back is absolutely a stone cold buy. >> just quickly on the fed here, do you think -- i mean the market seems to be suggesting they're veering more towards a second half, maybe september 1st rate hike from the fed as opposed to march or june as we were previously suggesting. do you think the problems that are going on around the world will continue to push out those expectations for a first rate hike, maybe even into 2016, jeff? >> i just had that conversation with my economist dr. scott brown this morning.
he still thinks it will be in the july time frame of next year. >> david, i want to switch gears completely. we have two types of viewers, one viewer that says why are you talking about ebola, you fear mongers? we have another type of viewer that says, my god, man, there's a plague going around the world, why aren't you talking more about ebola as it pertains to the global markets? where do you stand? >> these are questions that are almost impossible in the markets for us to know. i did a program i think the other day with you guys, you had one of the old health and human services secretary on there, he was talking about the plague of 1918. obviously very, very smart guy. who says these things happen and we need to con tan them and need to have things in place to deal with them and we don't. it's a shame that we don't. he was commenting that it all sort of needs to start at the local level. >> at some point, david, do people ratchet down their expectations for global economic growth because of what's going on? >> history has been littered with plagues and all of those
other things and society continues to grow and have business cycles and create and innovate. i'm not going to get too bent out of shape about it. it's a tragedy, particularly in africa. it's certainly something we should keep our eyes focused on. i would never sell short the ability for us to figure out a way to solve it or figure out a way to overcome some of the difficulties that come with it and create the next sustainable business cycle which could be in the biotech field, could be in the energy field, the communications field. that's sort of the big picture business cycle story. the short-term story is nothing in my opinion to do with ebola. it's nothing to do with the other things people are blaming it on, even europe. i think the real story is a complete misunderstanding of what's going on at the fed and nervousness about what the dollar will do versus what rates are going to do? >> thank you very much to both of you, jeff, david, for joining us today. >> thanks for having me. the dow jones industrial average is now down 311 points. it was lower earlier today.
>> that's right. >> we are down more than 300 right now. caterpillar, goldman, johnson & johnson, chevron and disney, your worst five performers. you know what is off today? oil. oil is off big. could oil prices really fall $60 a barrel? carl pickens is next. and it's what carl icahn did not say. we'll explain that. all 30 dow stocks are in the red. we'll be right back with more updates for you. location. location. (shouting) location. here's the location that matters the most. here. or here. or here. it's wherever this is. to get customers to come here and stay here,
to reiterate, the energy sector is literally being taken out the back and getting slaughtered. chesapeake, down 5%, many names are even worse. lower global demand, degreeing supply, basically crude prices moving to the downside. let's get to jackie deangelis at the nymex. >> it's an interesting question, mandy. the saudis and opec generally are in a tough spot right now. with brent trading around $90 a barrel, some of the opec countries are getting squeezed already. saudis break even, around $87 a barrel. it has a little bit of wiggle room. all eyes will be on that meeting next month, november 27th to see if there are supply cuts. right now, the cartel clearly
indicating they'd rather cut price than cut supply. their price dropped below the brent price for the first time in two years. i want to talk about domestic prices as well. crude breaking under $86 a barrel, 85 and change today. this is a key technical level. the traders i have spoken to on the floor telling me they think there's another leg lower from here since we have broken through this level. good news on the gasoline side. those prices have come down as well. consumers are getting a break at the pump. we are seeing gas prices in parts of the country under $3 again. that is very significant, presumably if consumers are paying less for gas, they will be spending that money elsewhere in the economy. guys, back to you. >> all right, jackie, thank you very much. yesterday, cnbc contributor john kilduff opened eyes when he said this. >> they do try incremental cut, get themselves back to 9 million
barrels in the context of the thanksgiving meeting next month or they go for it like they did in 1998, continue the oversupply, say they're going to go for market share and break the back of prices and hopefully break the back of their competitors like the canadian tar sands and the fracing industry, get the price down to $20, $30. >> could this really happen? joining us now by phone, boone pickens, do you see any scenario where oil prices could drop to $40 or $25 a barrel? >> i'm not sure if it will be that low but the saudis can cut production and support price, or they can teach the fracing guys a lesson here. because you know, we haven't seen -- it's held up good for a long period of time.
you've got 1900 rigs running in the united states today. and 1600 of them are running on oil. the other 300 are running for natural gas. well, natural gas, you saw what we did to ourselves there. i say the industry, we overdrilled, oversupplied and we saw natural gas prices go down and they haven't recovered. you could do the same thing to yourself on the oil. >> boone, you just gave two very different scenarios. saudi could cut production, drive prices up. we know they have budgets to meet and social entitlement programs to fund. or they could eat the losses to try to drive off some of those 1900 rigs that you just mentioned. which way do you think saudi will go? >> i don't think they'll do anything until the november meeting. and that's now six weeks away. and i think you're going to probably see it just kind of
stay on this track until you get to that meeting. i think you'll find out then whether they're going to cut and support or whether they're going to let it go ahead and drift on down. i don't, somehow, i'm not one that believes that the price is going to go down to $60 a barrel. i can see it going under 80 and i don't know, i don't see 70. but i see it under 80. and under 80 you're going to start see the e & p companies will cut capex and it'll sober everybody up. >> sober everybody up and potentially jeopardize the renaissance that the u.s. is enjoying in terms of its energy boom? >> yes, you could slow the energy boom down but at the same time, you know, the oil has been there 300 million years.
it isn't like slowing down and losing anything. it just slows down and when the price comes back up, everybody goes back to work again. >> there's really two sides to the oil investing story. your firm, bp capital, you also do invest in stocks. you have a couple funds there, twin line funds, et cetera. there's two sides. there's a supply side which you've talked about, the rigs, but there's also the demand side. lower gas prices are supposed to be the biggest tax break the american people can get. i would imagine the investing opportunities are very different between the supply side and the demand side? >> there's no question about it. i mean, the supply side is a tough side right now. because everybody's in, they paid a lot of money for leases and rigs cost $23,000 a day. and we are selling the demand side in those twin line funds, you know, get on the side of the
deal where you have the energy available to you. and the energy is cheap in america. we still have the cheapest energy in the world. we're 10% cheaper on oil and we're 75% cheaper on natural gas. so take advantage of it, play the demand side and that's what twin line mutual fund does. >> it's ironic, isn't it? one of the reasons why energy prices are lower, boone, there's lower demand globally, economic growth slowing down, et cetera. if we see a lowered energy price, it's like a tax cut. to what degree will it start boosting global growth again? >> well, i mean, there's no question that energy is the factor on global growth or recession. and energy has been a big driver in america. let's don't panic here this
thursday afternoon and decide that the energy boom is over and everything's got to pot, because that is not, i don't think for a minute, that's what going to happen. i just heard on your program a few minutes ago that we haven't had a 10% drawback in the market in four years. which is the longest running without a 10% pullback. and so, you know, the market's the market. and it's different every day. one thing you don't want to do is panic. and let's watch it, see what happens. no question the opec meeting, the 27th of november, could tell us a lot. we could see, you know, whether they're going to support or whether they're going to let it drift on down. so anyway, that's where we are. it's an interesting world, isn't it. >> it is. i tell you what, boone, you
haven't made your millions, billions and lost them and made them back again by panicking? >> no. >> that's one thing i know about you. >> the last thing you want to do is panic. >> boone pickens, appreciate it. we love it. >> from a pay phone booth on 57th and broadway. >> is he anti-mobile phones? is he one of those clever people out there that has finally caught on that mobile phones are the scourge of the society. >> he tweets. >> i've witnessed him do it myself. >> you've actually seen it. >> with my own three eyes. let's take a look at the numbers, 1930, a drop of 2%. we'll keep an eye on these markets for you. >> exactly right here, guys. we're all over the sell-off on wall street. if you're on the radio, they're all on the radio. there are ten major sectors. they're all done. approximately only 20 of the s&p 500 are higher. if you own investment rnado,
equity residential or hcp or spammaker hormel, congrats. those are the five biggest winners on the s&p right now. back after this. i make a lot of purchases for my business. and i get a lot in return with ink plus from chase. like 70,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning a business even more rewarding. ink from chase. so you can. ghave a nice flight!r bag right here.
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welcome back to "street signs." amazon.com grabbing headlines right now. according to dow jones, amazon.com plans to open its first brick and mortar store. again, according to dow jones, citing people familiar with the matter, they plan to open a brick and mortar store. the site is set to open in time for the holiday shopping season, located at 7 west 34th street, midtown manhunattan, right acro the street from the empire state building. amazon.com, according to dow jones, citing people familiar, will open its first brick and mortar store right here in manhattan in time for the holiday shopping season. if this experiment goes well, those people familiar say that it could be a model for other brick and mortar stores throughout the country, guys. back over to you. >> two quick comments. good news for the murray hill district of manhattan.
number two, asked the manager of an tt store, has anybody bought the fire phone? it's at 99 cents. the manager of the at&t store said and said i have sold not one to anybody even at 99 cents. >> at what point do they decide to pull the plug? >> you worn der. >> i think herb might be out there as well. >> according to the report, they were saying this facility could double not justs aa store front but a place that could house many inventory. possibly, again, for same-day delivery throughout the course of manhattan. right? this could be a store front, not just to have a showroom but also to how's a certain amount of inventory so people in manhattan
could actually have same-day delivery. maybe that's an added dynamic to the story as well, guys? >> herb, are you there? >> i'm here. you hear me? >> yes. >> because you said you thought that amazon might or should buy radio shack if i remember that. you felt they needed a physical presence for pickups at least if nothing else. >> hold on. right. i also said best buy. i've been all over there covering my bases. this has been rumored to are two years. originally people thought the company would open up a store in seattle. there was chatter about that in the seattle newspaper. nothing ever came of it. now you have them going down this road, volume dating obviously that brick and mortar isn't totally going away but certainly showing how competitive the space is. >> we showed a picture a moment ago. maybe we can bring it back up again. we showed a picture of where exactly that store willing on 34th street. do we have it again, guys? give people a street view of
where it will open in new york city. there we go. okay. a couple things here, the stock is rebounded up a dollar from its lows, still down big on the day. everyone's going to say now, herb, this is a reversal for amazon. amazon owns probably more real estate in the united states than almost anybody else already. albeit warehouses. distribution centers. >> brian -- >> hold on. would you feel if they did this retail store that it would be a complete destruction of its business model. >> i wreen recently wrote a piece on linked in. businesses have to constantly be re-inventing. in this case, amazon is saying we're doing things as an online retailer. they have to keep moving forward and trying new things, especially in the space they know the best. i would look at this and say, hey, good for them. they're not sitting still.
everybody's saying they ought to try this. if they're doing it in new york, they'll find out quickly whether it works or not. >> the reason i put ott the anecdote about the fire phone is you don't care about dog food in a store. i believe amazon will be doing this clearly to highlight their electronic products, instruct people on how the fire phone works and why it is worth their hard-earned money. they probably feel, i'm guessing, that verizon and at&t are not doing a very good job at showing the benefits of that versus an iphone or a samsung or an htc. and this -- they'll show you they are, too, an electronics company. >> it will be a strategy. it's not like they have a ton of products they can fill the store with, their own amazon-branded products. perhaps you're right. with the apple store, the microsoft store, you have the amazon store. best buy, you can walk in there and you can get price matched on
an amazon product. these guys, maybe amazon doesn't want to lose those sales themselves. i haven't seen the press release. who knows what's in it. >> jan rodgers, thliterally appeared out of nowhere. >> you're the retail maven. you know what's going on in this space. what do you think about this report? amazon will open a brook and mortar store on 34th street in new york. >> about a block away from harold square. >> what do you think about this news? >> next to mango. >> whatever that is. >> it's a great italian restaurant. >> as well as a fruit. >> i've been saying for five years that amazon needed showrooms. >> why? >> everybody needs showrooms. you need a place to show the
consumer what you're selling, what's interesting. they will probably put in a restaurant and bar at some point in time. why does ralph lauren have a join the store in new york? he does it for the halo, the advertising. getting people's attention. it will be a great idea. everybody needs online. everybody needs a showroom. these guys needed a showroom it's. >> across the road from the empire state building. there will be plenty of traffic from tourives as well. yes, herb. >> i'm wondering about that site. 34th street versus 42nd street. again, if you're not in new york you don't understand the significance. but it would seem -- even though it's the empire state building, it's edgier down that way. >> the most important tourist attraction in new york city is a macy's store sitting at 34th street. everybody goes there. it's a great place for retail. >> the reason i'm leaning over awkwardly, i'm putting best buy in my machine, my magic machine.
best buy stock down with the market. it's hard to know if it's reacting. if you're best buy's ceo, you just got more nervous, did you not? >> you sure did. >> we're going to go, guys, radio shack, rsh and bby. i know the mark set down. it's hard to know if this is related to that or not. you have to admit, if you're very troubled radio shack already, this is bad news. >> this is bad, bad news. okay. we'll talk more with you in just a second, jan. there's lots to talk about in retail. we are on session lows on the dow right now. the dow off by 336 points. it's currently -- there we go, 1.98%. let's call it a 2% loss for the dow. we'll keep an eye on that, too. small cap lighting company whose shares could jump another 20%, that by the way is in "street talk," coming up next.
aren't you supposed to buy low? >> buy low, sell high. >> isn't that the idea? >> should we hate this sell-off or is it a buying opportunity? we'll get a fundamental and technical view on talking numbers when "street signs" returns. in a world that's changing faster than ever, we believe outshining the competition tomorrow requires challenging your business inside and out today. at cognizant, we help forward-looking companies run better and run different -
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it lets you switch seamlessly from your desk phone to your mobile with no interruptions. i've never felt so alive. get the future of phone and the phones are free. comcast business. built for business. ve we're down by 311 points on the dow right now. we do want to get you updated on what has been a wild day on the markets. we'll find the opportunities as well in just a second. let's give you a little bit of detail here. with the dow down about 300 points, the last time that we've hit this level was july 31st. as you can imagine, utilities and consumer staples companies have been outperforming so far this month, though pretty much everything is down today, because investors are looking to more defensive stocks. the nasdaq off by 1.7%, the s&p
off by 1.8%. we'll keep on watching. >> as we pointed out earlier, vernado and equity residential, reits, they're winners today. one sector that appears to be doing well are residential investment trusts, the reits. dollar ten-year gold, the dollar index up a little bit. the ten-year yield, 2.33%. who's happier than a real estate agent right now? the only people happier than realtors right now, because mortgage rates will go down again are probably bankers that want to refi your mortgage. >> that's right. >> gold prices up 19 bucks to 1225.1. oil, lowest price since december of 2012. boone pickens said he thinks oil could go back below 80 bucks. he didn't necessarily see 70.
>> i want to add one statistic to what you were saying about gold. gold is up for the fourth consecutive day or fourth consecutive session. that would be its longest winning streak in seven months which does illustrate how bearish the sentiment has been towards this precious metal. time for "street talk." i just wanted to mention, despite the down day, part of the reason we do "street talk" we want to find the good stories. >> that's right. we dig out five stocks with analyst calls that maybe you'd like to know about, perhaps. here we go. >> an extra treat for you, a big call by bank of america, merrill lynch on two infrastructure stocks, martin marietta and vulcan materials. >> vulcan 20% upside. vulcan upgraded by long bill research, same $70 target.
>> men's warehouse is suiting up for a buy at jeffries. >> target is 60 bucks. a 20% upside. thestreet.com cut it from a hold to a buy. a battle over men's warehouse. >> mgm resorts up to a buy from hold at craig hallum capital. >> their target on mgm is 28 bucks. that's about a 25% upside scene. >> northwest utility stars, a buy at citigroup. >> their target about 22 bucks. a utility operating in the northeast, surprisingly enough does pay a 3.5% dividend yield. >> this is an atlanta-based lenchs. >> >> ayi is the ticker. upgraded to outperforming. their target 160 a share, about 20% upside, last week by the way, this stock spiked, net
income jumped 22%. from "street talk" to another daily segment, "talking numbers." normally we look at individual stocks. no, no, no. we are looking at the overall s&p 500 which is down more than 2%. we wiped out of yesterday's gains. where do we go next? dan greenhouse, bgit on the fundamentals. we have david zerbos said he thinks the issue with the market is confusion over the fed. do you agree or disagree? >> i'm not sure i would say it's confusion over the fed but certainly they're a contributetry factor. there's a lot of stuff going on in the market right now. there's a lot of cross currents. i think uncertainty about fed policy is a part of it. i think david is right about the fact that we know what the fed's been doing. we don't know what the fed is going to do when we finish the taper later this month.
when you look into next year, we've been expressing -- i don't want to say an enormous amount of uncertainty but some uncertainty about how the fed tightens. >> there's always uncertainty about the fed unless they actually come out, which they're never going to do and lay out a complete and utter road map for what they're doing to do and when. why is there so much more uncertainty now? >> i would push back on your push back. >> fair point. >> over the last 12 months there hasn't been a lot of uncertainty. there's been comfort with the idea of the so-called taper, the wind down of the asset purchase program. we haven't had to worry about the fed. we've been writing in our notes for months and months what was once a dominant part of the client meetings had been relegated to an afterthought. >> i'll push back on your push back to mandy's mush back.
they used the word appropriate 55 times. they used it 16 times in the previous minutes. the reason i bring that up is, you say that word when you're not really sure what you're going to do. i'll go there if it's appropriate. it said to me, the fed really didn't know what to expect going forward. if the fed is confused why shouldn't we be confused. >> let me end by doing back to david. he's right in the sense there is confusion about what the fed is going to do. again, from our vantage point, i'm not so sure if that is this part of the sell-off. >> you know, rich, you've been sitting there and listening to my push back and dan's push back and brian's further push back, have you got a push back of your own or would you like to give us the technicals for the s&p. >> nobody pushes me around. we are in grave danger here of another 10% down from current levels. bring up the charts, i'll show you exactly how we get there. the first chart is the
year-to-date chart. it's not overtly sinister. the key feature here is that 150-day moving average, comes in at 1930. we held that level, mandy, for almost two years. the last time we had a streak of success like that, it takes us back to '96 to '98. that culminated in a 23% decline from peak to trough. you see the alibaba, the proverbial bell which rings at the top on september 19th. let's move out. it goes from bad to worse. i just bring one indicator here on that long-term weekly. that's the 100-week moving average. that's your 10% down from current levels. if you want to get more sinister, we could talk about 1611. that's 20% down from the top. look, that's well within historical context here. i think this move could unfold in the very short term. 10% down from here. we could see that over the next week, perhaps two weeks where we get a nice buying opportunity
into a year-end rally. it's not panicking to sell stock. let's be perfectly clear here. you can sell stock and save money. no one is going to say you panicked. >> boone pickens says, absolutely do not panic. for all those naysayers out there, we said that alibaba did not signal the top. huh? >> he said it might happen. >> i still don't know what a bugasi is. >> it's a fraud. it's a matter of time before that whole sherr raid unravels. it's happening today and it's going to happen into the weekend and next week as well. >> wow. >> we have to go, honey. >> he's dying. there's blood coming out of the bottom lip he's biting it so hard. >> check out the cnbc section of yahoo! finance. >> we are continuing to follow this market decline. we've wiped out all the gains from yesterday. all the excitement from yesterday's fed minute rally but
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i'm courtney reagan. gap shares down more than 12%. bobby martin confirming it was entirely glenn murphy's decision to leave. the board actually asked him to stay. murphy would receive two years annual salary and bonus upon his exit but gap tells me he isn't eligible for that compensation because he's retiring for personal reasons. gap is keeping him on as an adviser through march at which time he will vest. back to you. >> excellent reporting. thank you very much. up next, this is the most volatile period we've witnessed in five months. is it the start of a bigger move now? we'll get expert advice for you, next. big mystery.
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thank you. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. and often even more. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $89.95 a month. comcast business. built for business. so much for the games of yesterday. the dow is currently down by nearly 300 points. this is the triple digit move in either direction for the dow in
18 sessions. let's bring in john manly from wells fargo funds. bob, a couple of guests on our show suggested that this could turn into something that resembles a correction. 10% or more to the downside. do you agree? >> i don't agree. i think it may have a potential to trade down to 1905. when you step back and look at the bigger picture, we still have some positive data going on in the united states. manufacturing continues to do well. durable goods factory orders. ism service index. we look at the job picture. initial unemployment claims, nonfarm payrolls. all of this is pointing to an expanding economy going on in the united states. really what the problem is the strength of the dollar, concerns about economic weakness overseas, concerns about the federal reserve. i think what you're going to see going on over the next few weeks is the earnings report starting to stem some of this tide. i think what you're going to see better earnings reports,
cautionary comments from some companies but going forward you're looking at 12% earnings growth for the s&p 500 trading at 14 1/2 times multiple. not that expensive to get more expensive. >> bob, just to follow up on the corporate profit side. to what degree and at what point will weakness around the globe economically speaking start to depress u.s. corporate profits? >> let's take a look at some companies out there. there are plenty of companies in the united states that are going to attract foreign investors. strengthening dollar is beneficial to foreign investors. companies that do primarily most of their business in the united states don't have that same kind of exposure. home depot, lowe's, take a look at a target. some of the other retailers. they don't have that same kind of exposure. those are the companies that it's initially going to attract attention. initially you'll see all the energy in the sector start to attract attention because the companies have been hit hard. >> john, are you in the correction or no correction camp
at in juncture? >> i think it would be very hard to have a correction. very sharp, nasty moves are typical of bull market corrections, i mean 4 to 7%. they're not bear market. that starts with slow loss of momentum. you don't have days like these in big bear markets. >> what would you do strategically. you're a chief equities strategist, what are you doing, john? >> i'm buying. i'm waiting a day or two. i want to see how the earnings come in. i see no reason to believe earnings won't continue to grow. i want to see that. if they start to come in where you have gains in earnings and on the top line, that will start to mean a difference. why is the fed going to tighten? i've made a career that the head of the federal reserve is as smart as i am. they're not going to do something like that. they're not going to throw the u.s. economy into a recession. dr. yellen will do what's necessary to be done. >> very quickly, what do you think is appropriate? when do you think they would start hiking and is it getting
pushed farther and farther out? >> yes, they'll only hike if they feel it has no impact on the economy. they have to adjust for stronger economy but they'll try to have no impact to slow that economy down. >> bob, john, thank you very much for your thoughts on the market. we'll bring you the green arrows. green is up on a very red day. stick around. big day? ah, the usual. moved some new cars. hauled a bunch of steel. kept the supermarket shelves stocked. made sure everyone got their latest gadgets. what's up for the next shift? ah, nothing much. just keeping the lights on. (laugh) nice. doing the big things that move an economy. see you tomorrow, mac.
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three green chutes. radioshack. this is up despite amazon.com opened up a retail location in new york city. that news broke in an hour. coffee, the cafe etf is up again. in fact, coffee now at 15% this month and it is up 94% year to date. and the s&p rooe etef. that's the ticker. they're up today so the re is up today. not huge but up nonetheless. it pays a 3.1 dividend. speaking of coffee, you can bet i tweeted out to herb to remind him that our bet is over, coffee is up 94% year to date. >> you sound like you've got a real axe to grind there, brian. why remind him of his loss, that's pretty bad. >> i got it. >> good one. you're a clever boy. anyway, the s&p is down 38 points, 39 points.
we had a worse point day and that was back on the 3rd of february of this year when we were down by 40 points. there you go. we're off by 38 points on the s&p. the dow is down by 323. thank you for watching "street signs," everybody. closi "closing bell" coming up next. what a day. welcome to the closing bell. i'm kelly evans at the new york stock exchange. volatility is certainly back in these markets. >> that is for sure. i'm bill griffeth. a daily occurrence these days, when you think about it, today in part attributed to comments by mario draghi of the ecb. so let's review. janet yellen got a 270 point rally yesterday but mario draghi gets a 350 point selloff. >> i think the market's verdict is pretty clear on the different directions of central bank policy. >> who they're most concern